Saturday, September 03, 2005

Agent takes principal to cleaners :: GN


Employees in some real estate agencies are making a quick buck, milking the sharp escalation in rents, sources said. "As long as the landlord gets his amount he is not bothered about how much each individual tenant pays," said an employee of a real estate company. . . .

A manager of a Sharjah-based real estate company said: "The real estate owner has several multi-storey buildings with 12 flats on each floor. He hardly comes to the office except for a couple of hours in the evening.

"I, along with three other employees, look after dealings with tenants. This year the going rate of a single bedroom flat in the Al Wahda area in Sharjah is approximately Dh33,000 to Dh35,000.

"Based on this, we increased our rents too. Some tenants are unable to pay the rent. We do some adjustments for them." . . .

The landlord, therefore, is happy and does not know of the deal with some tenants.

Anita Shastri is single and lives in a one-bedroom apartment near a mall in Sharjah. She said she is prepared to pay an extra Dh500 or Dh1,000 to the real estate manager and get a reduction in the rent increase.

"My tenancy renewal was up on August 1. I was scared wondering what I would do if my real estate agent increased my rent. I was paying Dh18,000 and have lived there for the last four years. I had Dh5,000 saved specifically for the rise in rent. I got a shock when I learnt my rent would be going up to Dh35,000. That was not in my budget. The watchman of my building told me that if I spoke to a particular person in the real estate agency I might get a reduction. I got in touch with this person who asked me to come at 6pm. He later told me that he was one of the employees. He then told me that if I wanted to get my rent increase reduced I would have to pay Dh500 to the manager. I paid Dh500 and I got just a Dh2,000 increase in rent. It was such a relief," she said.
The owner, or principal, is not monitoring the agents or the market and assumes rents have not changed. The agents are well aware that rents have increased and tenants who refuse to accept an increase in rent can be replaced by new tenants who can't find vacancies at lower rents.

The agents may also be playing off the incomplete information some tenants may have about the market. This would explain the "discount" system. It could also be that the agents don't want to trigger turnover or complaints that would draw the attention of the owner; tenants that are more likely to do so can negotiate a lower price with the agent.


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